Gulf steel mills to increase exports to Iraq
Dubai, October 30, 2009
Steel manufacturers in the Gulf region are looking to increase exports to Iraq as the country redevelops its infrastructure and housing sectors, industry executives said.
Global steel demand has slumped by more than a tenth in the past year, leaving inventories swollen and sellers struggling to find markets.
"Demand has dropped all over the world and to find a market where so much steel is needed is a blessing at this time," Bhaskar Dutta, chief executive of Oman-based Jazeera Steel, told Reuters in a telephone interview.
His company exports around 200 tonnes of steel a month to Iraq.
The US-led invasion, security concerns, and years of wars and sanctions under former President Saddam Hussein have crippled Iraq's infrastructure and delayed projects including the expansion of power plants and developing the oil industry.
In July, the Iraqi government said it was lining up at least $30 billion in housing and commercial developments over the next decade as it looks for homes for a rising population and hopes to revive a city shattered by war.
"Iraq has a lot of potential in terms of demand and we are looking to increase our exports to 500 tonnes per month by next year," Dutta said.
UAE-based Al Ghurair Iron & Steel also plans to increase its exports of galvanized steel to the emerging country by next year.
"Iraq is building itself up from scratch and in order to do that they need more steel, that's where we come in," BS
Shetty, commercial manager of Al Ghurair told Reuters, adding the company currently had limited trade with Iraq.
This month, UAE's state-owned Emirates Steel Industries said it had plans to export steel to Iraq.
Red tape, bureaucratic procedures at ports and limited gurantees on payments in Iraq were all concerns steel mills had, said Dutta. "That's why we are not jumping into that market. There are so many risks that we would have to face."
For now Jazeera Steel and Al Ghurair export steel to Iraq via traders.
"We would like to have direct interaction, but till things get better we have no choice but to let the traders take the risk of failed or late payments," Dutta added. - Reuters